Nintendo President: The Free Market Is Not A Game We Like To Play

from the no-cheat-codes-in-the-real-world dept

Nintendo President Reggie Fils-Aime really has a way about trying to suggest that perfectly reasonable and consumer-friendly market developments portend the end of video gaming. Two years ago, we wrote about his attempt to convince people that used video games were bad for consumers (yes, he said that) and his latest, via Slashdot, is to claim that cheap games are a risk to the entire video game industry.

His main concern, it appears, are games for mobile phones that run a dollar or two. He's complaining that these games:

Create a mentality for the consumer that a piece of gaming content should only be $2

Darn those consumers for actually going where the market goes, when Nintendo apparently would prefer to keep things priced at what the market doesn't like. Welcome to the modern world, Reggie, where prices change, and businesses adapt. I'm sure the last laptop you bought cost a lot less than the one you bought a decade ago, but that didn't herald the end of laptops. It's a digital age: prices get cheaper, and the only companies that are really at risk are those who don't adapt and don't learn to be more efficient. Oh, wait... perhaps he's telling us something about his employer...

Re: Re:

Re: Re: Re:

I have honestly been waiting for someone to propose a law that restricts people from giving away things for free. It wouldn't go anywhere in Congress, but I wouldn't put it past some politician to try it.

Re: Re:

The development costs remain the same, but the retail price of the game drops, what, 97%? Taking a Nintendo game from $40 and turning it into $1 would require them to get 40 times as much market to make the same money. I can see where they have a problem with this.

Re: Re: Re: Re:

Not unrelated actually. Theoretically, having the McDonald's 1$ menu available should ensure that Ditka's has to provide other forms of perceived value in order for people to accept the price difference. They are still competition, it's just that price is not the only factor they are competiting in.

Re: Re: Re: Re:

The fear is somewhat different here - in some genre cases it's technology which is allowing games that should be priced at least around $10 to be priced much lower by developers who aren't aware of the value of their product. In other genre cases, it's large companies feeding into this cycle by spending parts of their budget on fancier games intended to be loss-leaders for their AAA title.

The first case is less a danger to the "Ditkas" out there; it's those developers shooting themselves in the foot by devaluing their own product. As they grow, costs are going to rise while the tech they're on will stay essentially the same. Quality will go up art-wise and content-wise, but mobile game customers value gimmicks over polish, so their higher-priced follow-up game is going to be in a tight spot. With a decentralized market that has no authority behind it, it becomes very difficult for devs to just decide "okay we've enticed our customers, now it's time to sell our product for what it's worth" when that shift isn't happening around them. 'Divided we fall' and all that.

In the second case, it's bigger devs will less of a stake in this market (these are the real McD's and Burger Kings - dollar menus are loss leaders after all), helping to perpetuate a culture of devalued content. There's a reason you don't see independent burger stands that sell hamburgers for a dollar. Or I could go with a Walmart analogy or something. It's similar to that, except in this case, the small devs are too naive to realize there's a problem here yet.

Yeah, Nintendo sounds whiny here and I have little sympathy for them. This is really just them preemptively inventing an excuse for their shareholders, when it turns out the 3DS is way too expensive for the demographic it's going to be sold to. But just because Fils-Aime is full of it doesn't make the mobile game pricing problem nonexistent.

Re: Re: Re:

So true. I went into BMW dealership the other day and was appalled that they weren't priced the same as the Kia dealership down the street.

You see, as a consumer, I can only maintain one idea in my head at any given time, and today that happens to be a piece of data called "price", so I have absolutely no spare brain power to use in making value judgements that don't begin and end with that number. HURR DURR! I R CONSUMAR! PLZ SAEV ME NINTENDOH!

Re: Re: Re:

They evidently don't. What's odd about this is the dual mentality of Nintendo - on the one hand they recognise and even embrace the idea of trying to build some kind of unique value to effectively compete and gain interest, something evident throughout various statements by execs and the likes of Miyamoto, but on the other hand make statements like this where the idea of having games below x price somehow means that will automatically mean an industry wide apocalypse.

The market will not expect them to develop for the same cost at 1/40th of the price so long as that development cost is justified, provides something you can't easily get elsewhere and the end price is in line with how much people value it.

Re:

Your math is ridiculous. At $40 there are numerous costs involved, including packaging, shipping, manufacturing, import/export costs, dealer/seller fees for shelf space and floor space, etc. At $2 the development costs remain the same, but all those other fees go away. Profit margins are far higher with a system of digital distribution. There is NO REASON why a game distributed digitally should cost the same as one on a store shelf. The only reason they do that is to maintain their store presence. Look at Walmart. How much shelf space does it commit to CDs now? Why is that? It's because the CD companies refused to let Walmart sell singles in store for 99 cents. Hell, they argued like mad to keep Walmart from dropping CD prices to be competitive with iTunes. Could you imagine what would happen if game companies dropped prices for digital downloads as compared to their in-store counterpart??!! It's all about corporate greed and protecting the retail pipeline at this point.

Re: Re:

True..... everything is going to go to online distribution (which cuts out packaging, import/export costs, dealer/seller fees, and a bunch of other fees.

Even if you have to mail someone something by FedEx, it would actually cost you LESS in the long run to do that than to do the regular things, especially since now the CONSUMER is paying for the shipping.

A lot of games out there should be 20 dollars tops. Even Dead Space 2 (which me and my friend put our money together to buy) is not worth 50 dollars on PC. It's worth about 20 from what we saw, how short the game is, etc.

Re:

Your math is ridiculous. At $40 there are numerous costs involved, including packaging, shipping, manufacturing, import/export costs, dealer/seller fees for shelf space and floor space, etc. At $2 the development costs remain the same, but all those other fees go away. Profit margins are far higher with a system of digital distribution. There is NO REASON why a game distributed digitally should cost the same as one on a store shelf. The only reason they do that is to maintain their store presence. Look at Walmart. How much shelf space does it commit to CDs now? Why is that? It's because the CD companies refused to let Walmart sell singles in store for 99 cents. Hell, they argued like mad to keep Walmart from dropping CD prices to be competitive with iTunes. Could you imagine what would happen if game companies dropped prices for digital downloads as compared to their in-store counterpart??!! It's all about corporate greed and protecting the retail pipeline at this point.

Re:

The thing is, he's comparing the development costs of an game app (which are notoriously cheap to produce) and a full fledged console (or computer) game. The costs here are so astronomically different that I don't understand why he would compare the two.

These game apps are a way for a company to start out in the business with relative ease and get their feet wet.

this is strange, i wonder what else the context was. nintendo makes and sells games on the DS for $2, hell they've put out games for free.

i believe the implication is more that something simple, like a castle defender, vice something complicated, say a Zelda game are two different levels.

you shouldn't expect Zelda for $2, nor should you expect a flash game for $30.

so perhaps the concern is that newer gamers are associating these small games at $2 with all video games.

just a hypothosis.

oh and the market seems to like $60 games just fine, mike. for evidence, see call of duty. but then again, COD isn't just a castle defender. or even the sacred angry birds. there is a difference.

i suspect the problem is more vocabulary based. think of it it in terms of the written word. there is a difference between: novel, short story, chapbook, pamphlett and multi-volume epic. each brings to mind size, scope, and price.

you would not expect to get all of the wheel of time books for a dollar. yet you can get many short stories for that, or sometimes even a book on sale for that.

but on the same notion, $100 for a short story? that better be some high value, low print collectors item. and even then...

so (yes i am rambling, sorry) if there were better ways to describe the tiers of video games, i believe this quote wouldn't sound so, well, bad.

Re:

you shouldn't expect Zelda for $2, nor should you expect a flash game for $30.

That's reasonable, except there are a lot of free Flash games that are as big as Zelda. So what then?

Anyway, I don't know what the context is either, but I strongly suspect that he's bracing for a weak 3DS launch by finding something to blame beforehand. That way he has an excuse he can point to for his shareholders.

Re: Small correction

Re: Re: Small correction

Reggie has been spewing stupid shit for years - he once stated for the record that there would be a Zelda movie, with no basis in fact. He has a track record of doing incredibly stupid things, but he isn't THE mover and shaker in Nintendo at large.

That said, the direction Nintendo has been drifting in lately is disconcerting; not as bad as what Sony's been up to, but still painful to watch.

Re: Re: Re: Re: Small correction

They've also got a digital store, which they're holding back with a later firmware update. I imagine the strategy is to let the system get jailbroken, get everyone comfortable with that, then launch the digital store in a way that makes it impossible to access from a jailbroken 3DS.

In any case, there's no reason for Fils-Aime to be complaining like this, since Nintendo will most likely have a much tighter hold one digital game prices in its store than Apple or Android. If they say digitally downloaded 3DS games must be at least $10 or $20 dollars, the devs must oblige (probably without complaint). So his speech is all bluster.

Reggie's being really silly and short-sighted here. I think most consumers understand the difference between a big-budget, big-screen game that will deliver a long, engrossing experience, and a $1 phone game that will entertain them in brief spurts on the subway. Nintendo's challenge here is to make SURE customers understand that distinction, if they want to keep producing big-budget games and selling them at (understandably) higher prices.

The real test will be if Nintendo can recognize that consumers clearly enjoy these small, cheap games, and diversify its own product line to accommodate that - not only creating their own "mini games," but opening up their gates a little so 3rd parties can, as well. I don't think handhelds like the 3DS can compete in the long run against smartphones if they don't create a gaming marketplace open to all developers, like Apple's app store. Through branding they could clearly distinguish the difference between this marketplace and their own big-budget games. And I guarantee they'd make a lot more money than they currently are on their incredibly lackluster digital download store.

Hardcore gamers will always be there for the big console companies. I think what Nintendo's really miffed about is that they made huge gains in opening up gaming to a casual audience with the Wii and DS, but now that the same casual audience can play Angry Birds on their phone for a buck, their Wiis and DSs are collecting dust. You'd better adapt, Nintendo, or that "blue ocean" of yours will dry up.

Re:

"Reggie's being really silly and short-sighted here. I think most consumers understand the difference between a big-budget, big-screen game that will deliver a long, engrossing experience, and a $1 phone game that will entertain them in brief spurts on the subway."

"Speaking with CVG at the Nintendo 3DS event in Amsterdam, Nintendo UK general manager David Yarnton and marketing manager James Honeywell said that not only did the 3DS have Nintendo's most sophisticated anti-piracy deterrents yet, the age of the pirates had peaked."

Hello

I wonder if this has anything to do with Angry Birds. They are making a killing selling for either free or .99. Even the cheapest DS games go for around $20. I bet they want it even lower and Nintendo doesn't know what to do about it.

Note to Self

Unlockable content that they include with the Game Disc, but make you have to pay $2 for does not count towards creating this mentality. Nor does any of the other downloadable content that costs $2. Instead it's only competitors (meaning people making games for mobile phones).

Analysis: World of Goo’s iPad Launch

When the iPad came out, we thought we’d try again, this time with a fresh round of confidence that the bigger, more powerful device would be able to support a console quality port of World of Goo. We started working with Ron’s brother, Gil Carmel, in November 2010, who finally got this project done. There is nothing all that remarkable to tell about the development of World of Goo for iPad, but this being our first App Store title, the month leading up to launch and the month that followed were very interesting times, as we gathered information and lessons about the App Store market that we hope will be of use to other developers.

Re: Re: Analysis: World of Goo’s iPad Launch

Except on the DS download store, where games range from around $2-10. But hardly anyone uses it, because it's DSi-only, a pain to use, under-promoted, and not open to all developers. Apple became a gaming powerhouse - and is driving this market push towards cheaper games - because they have a great, tightly-integrated app store that's open to basically anyone who wants to make a game. That kind of access to developers has led to a booming market of innovation, variety, and quality that makes Nintendo's download store look like a joke. Some people rag on Apple's app store for not being truly "open," but really, it's pretty damn open, especially compared to how closed off game consoles have always been.

Nintendo has always been at least a generation behind when it comes to the internet, so it's going to be a long time before they figure this out and adapt. Even Xbox has indie games, which are free to try and give Xbox Live's marketplace a hint of that mass novelty that smartphone app stores have.

Stupid Prices...

Yes, and gum used to be nickel and now it's $1.29 a pack. That's kind of a kick in the teeth, as it were. And I need that gum cause I smoke, which used to cost me $13/carton and is now closer to $60. Oh, and gas was around .99 a gallon when I started paying for it myself and now I'm happy to find it for under $3.50.

You can "imprint" consumers the other way as well, Reggie. Sure, a lot of this is taxes and cost-of-living, etc. but people are still happy when gas falls under $3/gallon because it seems like a bargain compared to last week's run up towards $4.

I'm not sure what point he was trying to make and I'm even less sure about mine, but the free market doesn't ONLY drive prices down to unsustainable levels.

Nintendo, DRM, and your game saves

Speaking of Nintendo doing stupid things, did you know they apply DRM to your game saves? Each Wii has a per-console key that is used to encrypt save data when it is exported to the SD card.

It gets worse. Some games straight up refuse to let you back up your game saves. I bought a game for the Wii called Ghost Squad. I played it for a while, unlocked a bunch of guns.

Then I decided to go to my buddy's house. Seeing as how I earned those guns, I wanted to take my game save over to his Wii so we could pick up where I left off. When I tried to copy it over to the SD card, I got a message about how that save is copy protected.

Excuse me? Since when is Nintendo allowed to tell me that I can't back up my save game, or take my save game to a friend's house? Seriously, WTF? I ended up getting a Homebrew Channel application that allowed me to remove the Copy Protection flag from saves. Thank you, hackers, for once again freeing the device that I own so that I can do what I want with it.

Re: Re: Nintendo, DRM, and your game saves

System Menu 4.0 finally closed the Twilight hack, but it didn't use the Copy Protection flag...instead, the System Menu deletes the save if it finds it, and then analyzes any save from the SD card before copying it over, refusing to copy Twilight Hack saves. Bannerbomb was then the exploit of choice, since it didn't even require a game to launch. Bannerbomb was finally closed with 4.3, and now we're back to savegame exploits like Indiana Pwns, Return of the Jodi, Bathaxx (apparently all Lego games can be exploited), Smash Stack, etc.

Besides...the implementation of the copy protection flag on game saves existed at launch, long before the Twilight Hack. And it doesn't affect all game saves, only some of them. You can still copy Twilight Princess saves to your SD card, even with 4.3

Re: Re: Re: Nintendo, DRM, and your game saves

DCX2, please contact me via email/chat if you don't mind (rrezendes at gmail). I have some questions I'd like to ask since I have modded my Wii with HB but the disc drive has gone south on me. Should I have the drive repaired then add an external drive or skip the repair? How large a drive should I use - my initial thought was 1TB.

Re: Re: Nintendo, DRM, and your game saves

A friend of mine did something similar with his umodded XBox 1 years ago. Funnily with a save game from a game by Microsoft when one of their Talking Heads had just complained about security in a game by a third party developer whose save game also could be used to start unauthorized code.

Here ya go Nintendblow

Crysis series
Half Life series
Bio-shock series
Max Payne series
Deus Ex
Alice
Assassin's Creed
Doom series
F.E.A.R
Far Cry
Grand Theft Auto series
Prince of Persia
Splinter Cell series
Velvet Assassin
And yes even the Zelda series.
All games I wont hesitate to pay full price to own.

Re: Here ya go Nintendblow

I've owned one or multiple titles in six of those games you mentioned....

But how the hell could you not include the Final Fantasy franchise? If you want an example of a big game done right, one that is clearly worth a bigger price tag due to the player's want, nay NEED, to replay it several times, Final Fantasy 7 is still the prime example....

Re: Re: Re: Re: Here ya go Nintendblow

I loved the SNES versions of FF. But the new direction they took does not interest me as much as the others. The SNES versions were epic. Today is just kinda the same weird haired androgynous dudes. they are too "Japanesey" for me

Re: Here ya go Nintendblow

Your little $2 games are loaded with ads and tend to have gameplay entirely centered around one repetitive sequence of actions and usually use a single palette of objects/tiles/shapes to create every single setting/level. They are often quick-generated with existing iPhone app generation tools and entirely stop selling any copies what-so-ever once they leave the "top games" listings on the App Store.

I'm not surprised

I am not surprised that Nintendo doesn't like the competition, seeing as they are subsidized by inflationary bubbles and their whole market depends on the state-enforced monopoly of so-called 'intellectual property'.

Video game producers are nothing but government whores, which is why all video games fucking suck these days.